Assembly spends $171,000 to restore arboretum endowment

Instead of a loan, city makes no-strings-attached gift to park

Posted: Wednesday, January 14, 2009

By JEREMY HSIEH

Taxpayers will end up supporting the Jensen-Olson Arboretum, a 14-acre park its previous owner willed to the city along with about $2 million for its upkeep, after the Juneau Assembly voted Monday to restore cost overruns that bit into the endowment's principal.

City Manager Rod Swope proposed the endowment be restored with an indefinite, no-interest loan of $171,000, but in a 6-3 vote the Assembly killed the loan terms and made it a straight appropriation with no strings attached.

Mary Mearig, chairwoman of the arboretum's advisory board, asked for the change. She told the Assembly the board had not taken part in the decisions that led to the shortfalls and that the debt would be a heavy burden to bear.

Master gardener Caroline Jensen, who died in 2006, forbade spending the principal of her endowment. However, operating costs and $70,000 in major repairs to the on-site home, where the arboretum's manager now lives and pays rent, overran the interest in the first year by about $10,000. Through June 2009, another $161,000 in investment losses and operating costs are expected to accrue.

Assembly member Sarah Chambers questioned why the arboretum wasn't shut down while the investment market keeps the endowment from fully supporting the arboretum.

"We're obligated as recipients to follow her wishes," said Marc Matsil, director of Parks and Recreation.

"Regardless of cost?" Chambers asked. After a long pause, she continued. "I'm not trying to be facetious. It's a legitimate question."

Deputy City Manager Kim Kiefer stepped in.

"Ignore it for a year, you lose so much of what she's put in," including non-native plants she brought in from other countries and plants she had received as gifts, Kiefer said. "The idea is, you've got to do that because you can't gain back what we lose after just walking away."

Assemblyman Randy Wanamaker voted to retain the loan language, saying it was the prudent thing to do given declining city revenue and the recession. Chambers and Jeff Bush also voted in the minority.

Assemblyman Bob Doll argued that the difference between arranging it as a loan and an outright appropriation was immaterial.

"One way or another, the city manager has to come up with it," Doll said. "Repayment might be decades away. It's just a style change."

The free arboretum is located about 23 miles out Glacier Highway. About 2,200 people visited it in 2008, according to Mearig.